Brussels, 30/03/2005 (Agence Europe) - The European Commission on Wednesday issued a recommendation to member states containing “best current practices” in wholesale leased line pricing and setting benchmark prices to guarantee a competitive market throughout the EU. It feels that the prices of these wholesale leased lines, which are indispensable for large businesses to create internal networks and for smaller ones to have access to the internet, do not always reflect supply costs. The proposed measures are intended to help member states to change practices on leased line supply markets that are not sufficiently competitive on their territory, thus putting an end to the significant variations in price from one member state to the next. The Commission notes that for a 2 Mbit/s line 5 km long, the price in the most expensive member state is in fact seven times higher than that in the cheapest member state.
Leased lines offer high-quality symmetric and dedicated transmission capacity. They are supplied by traditional telecommunications operators but also by new companies that have their own networks but need to link their customers' premises to them. This link, called a “leased line part circuit”, is usually provided by the traditional operator at prices that do not always reflect the real cost of service. “Competitive pricing of leased lines will expand the range and cut the costs of electronic communications services that are made available to business users and end-users across the EU, and in particular to small and medium-sized enterprises, which have much to gain from lower prices for business services offered by operators making use of these inputs”, said Information Society and Media Commissioner Viviane Reding. The Commission adopted a recommendation on 21 January 2005 on binding delivery deadlines for wholesale leased lines (see EUROPE no. 8875).